- The rupee is expected to trade at Rs 325 against the dollar by June 2025.
- It is likely to fall to Rs 295 by the end of December 2024.
- The policy rate will remain in the 17% to 19% range by the end of this year.
KARACHI: The Pakistani rupee is currently trading at 278 rupees to the dollar but is expected to depreciate to as low as 295 rupees by the end of December 2024 even as the government hopes of securing a fresh bailout package from the International Monetary Fund (IMF). news It was reported on Sunday.
“As Pakistan navigates these rough seas, we expect near-term economic challenges to continue due to rising inflation and shrinking demand,” Tresmark said in a client note published the previous day.
The forecast comes after Minister of State for Finance Ali Pervaiz Malik claimed the government expected an IMF bailout of more than $6 billion after meeting all the IMF’s demands with a tax-heavy budget.
In its budget proposal, the government sought to raise revenue and stabilize the country’s economic indicators by raising taxes on already overburdened salaried workers, bringing exporters into the standard tax system, raising oil taxes, and imposing new taxes on the real estate sector.
“We’re doing this [IMF] It will be processed over the next three to four weeks,” Malik said.Reuters.
This week, the rupee traded in a narrow range due to the supply and demand balance of the dollar in the market and witnessed some fluctuations throughout the week before recovering losses to close at Rs 278.37 on Friday.
Elaborating on the trends in the local currency, Tresmark’s notice said the rupee is projected to trade at Rs 295 per dollar by the end of this year and Rs 325 by June 2025.
Positive indicators such as a narrowing trade deficit and a resilient stock market point to a gradual economic recovery, and the agreement with the IMF, which is expected to provide $6 billion to $8 billion, is crucial to stabilizing the economy, Tresmark said.
However, the potential impact of tax measures in the Finance Bill and higher fuel prices could further squeeze purchasing power and demand, the report warned.
Regarding policy interest rates, he said he expects them to remain at 17-19% through December 2024 to counter inflationary pressures from growth.
Meanwhile, economist Saqib Sherani, head of the private firm Macro Economic Insights, said a quick agreement with the IMF was needed to avoid pressure on the country’s foreign exchange reserves and currency due to approaching debt repayment deadlines and the lifting of previously applied capital and import controls.
